 "Indians investors rushed to buy properties in Greece in recent months. Representational Image/AFP")
Greece emerged as a go-to destination for wealthy Indians to buy property in recent months. The European Union (EU) country saw an over 30 per cent surge in demand from Indian investors before the new rules of its Golden Visa programme came into force on September 1.
Launched in 2013, the initiative has helped to attract foreign investment to Greece. However, the country has tweaked the programme amid rising property prices.
Let’s take a closer look.
What is Greece’s Golden Visa programme?
Greece’s Golden Visa offers residency permits to those making significant property investments in the country. Under the programme, applicants can obtain a five-year residency in Greece and access to travel across the Schengen Zone without a visa.
Foreigners can avail of the visa by making a real estate investment, buying government bonds, or through a direct capital transfer into a Greek enterprise.
To get residency, people needed to make a minimum real estate investment of €250,000 (Rs 2.3 crore). This was one of the lowest thresholds in Europe, making Greece an appealing choice for foreign investors.
The programme helped boost Greece’s real estate market, with key regions including Athens witnessing an upswing in development, as per an Economic Times (ET) report.
However, the rise in demand led to a sharp increase in property prices, particularly in highly sought-after areas like Athens, Thessaloniki, Mykonos, and Santorini. This made housing unaffordable for local residents, fanning the housing crisis in these regions.
To keep prices under check, the Greek government decided to raise the minimum investment requirement.
Changes to Golden Visa scheme
Earlier this year, Greece announced significant changes to the Golden Visa programme, increasing the minimum investment. For areas like Athens, Mykonos, Santorini and the islands with a population of more than 3,100, the bar has been raised to €800,000 (Rs 7.5 crore).
Property investors will have to spend at least €400,000 (Rs 3.7 crore) in other regions of Greece under the new rules. These changes were enforced in September.
Notably, the Greek government has made room for a transitional phase. The investors who sign a pre-contract or private purchase agreement for a property by September 30 can benefit from the old threshold, provided they complete the purchase by December 31, 2024.
The new rules are a part of the wider plans to make housing affordable for Greek citizens and promote more equitable development.
“The government hopes this will encourage investment in less crowded areas while addressing local housing needs,” Greece’s finance minister Kostis Hatzidakis said in April.
Indians rush to buy Greece properties
Indians reportedly sped up efforts to snap up properties in Greece before the changes to the Golden Visa came into force in September.
The EU nation recorded a 37 per cent jump in Indian buyers between July and August, as per a Moneycontrol report. “We saw a rush of Indian homebuyers in recent months, to the point where we sold out our available residential stock in Greece. Many investors purchased under-construction projects with handover periods of six-twelve months,” Sanjay Sachdev, Global Marketing Director of property development firm Leptos Estates, told the outlet.
The Golden Visa programme has appealed to India’s rich who want to set up second homes in Europe, seeking a change in lifestyle, high-quality healthcare and education and decent rental income.
In Greece, rental yields usually range from 3-5 per cent every year, with property values appreciating by 10 per cent year-on-year, noted Moneycontrol.
“Greece and Cyprus remain top real estate choices for Indian investors, especially after countries like Portugal, Spain and Ireland closed their permanent residency programmes,” Sachdev said.
The change in Greece’s Golden Visa rules could drive investors to other alternatives like Portugal or Spain. It remains to be seen whether wealthy Indians will ditch Greece for more favourable options.
With inputs from agencies